Friday, March 11, 2011

Metals-Energy Update: Silver soars to $35, gold rebounds, Oil spikes

Published on: March 06, 2011 at 17:25

By Devi Gopalakrishnan, Commodity Online Info Service
Gold prices boosted by safe haven appeal rebounded to $1428 levels but still short of the record 1440 set on March 2 while silver prices soared to $35 an ounce on mounting unrest in Libya. Middle East and North African tensions continue to impact commodities especially crude oil which has seen a surge of 6.7% in New York this week.

U.S. Commodity Futures Trading Commission (CFTC) informs that net long positions in U.S. gold futures contracts held by speculators rose nearly 10% last week as bullion prices rose by 2.5 percent.

Precious Metals
US Gold futures reorded 1.4% growth thanks to tension in Libya that gave a boost to safe haven appeal of gold. Bullion hit a record high of $1,440.10 an ounce on March 2, recording its fifth consecutive weekly gain on fears that Libya's rising unrest may spread across the Arab world.

Gold may gain in New York as turmoil in Libya and concern inflation will accelerate boost demand for an alternative investment.
Gold futures for April delivery rose $12.20, or 0.9 percent, to settle at $1,428.60 an ounce on the Comex in New York. The metal rose 1.4 percent this week.

Silver futures for May delivery jumped $1, or 2.9 percent, to $35.327. Earlier, the price reached $35.405, the highest since March 1980. In that year, the metal reached a record $50.35. This week, silver gained 7.3 percent, the sixth straight increase.

Palladium futures for June delivery fell $5, or 0.6 percent, to $809.80 an ounce on the New York Mercantile Exchange. The price, up 2.8 percent this week. Platinum futures for April delivery rose $4.90, or 0.3 percent, to $1,837.90 an ounce. The metal up 1.9 percent this week.

In Indian market, MCX April Gold Futures opened the week at 20971 and rose 0.60% to 21098 after hitting a high of 21190 while June contract rose 0.29% to 21398 per 10 gms after hitting a high of 21470. MCX Silver March opened this week at Rs.50423 and ended higher by 0.98% to Rs 50740 after hitting a high of 52925.

Crude Oil
Crude oil surged this week on concern unrest in Libya will spread to other North African and Middle East energy exporters, curbing shipments. Oil prices may rise further next week as civil unrest in the region fuels concerns of prolonged supply disruption.

Crude oil for April delivery increased $2.51 to $104.42 a barrel on the New York Mercantile Exchange. The contract rose 6.7 percent this week.
Brent crude for April settlement rose $1.18, or 1 percent, to end the session at $115.97 a barrel on the London-based ICE Futures Europe exchange. The contract gained 3.4 percent this week, the sixth straight weekly increase.

Brent may advance past $119 a barrel as prices continually surge above ranges and moving averages, according to technical analysis by Glen Ward, head of retail derivatives at London Capital Group Holdings Plc. (LCG).

At MCX, Crude oil March contract rose from Rs.4485 to Rs.4731, up by 5.36% after hitting a high of 4739 whereas the April contract gained 4.84 per cent to Rs.4806 after hitting a high of 4813.

Base Metals
Copper prices at London Metal Exchange gained 1.5% this week as tensions mounted in Libya and Middle East causing fears that rising crude oil prices will stoke inflation and curb growth. At LME, three-month copper fell to $9,895 on Friday after a recent record high fo $10,190 per tonne.

Copper is well supported by global economic recovery signals and estimates of growing Chinese demand. Copper demand in China may grow by 7 percent this year on strong economic growth, according to Jiangxi Copper Co. Demand for copper is surging as the nation plans to build more homes, autos and appliances and upgrade power-grid networks. Copper touched a record $10,190 a ton last month after surging 30 percent in 2010 as the global economy recovered from the worst recession since World War II.

Futures on the Comex in New York gained as much as 0.5 percent to $4.5120 a pound, before trading at $4.5105. May- delivery copper on the Shanghai Futures Exchange rose 0.8 percent to end at 74,720 yuan ($11,378) a ton.

Lead in London gained 0.5 percent to $2,629.75 a ton, nickel rose 0.4 percent to $28,975 a ton and tin added 0.3 percent to $31,755 a ton. Aluminum was little changed at $2,615 a ton, and zinc was little changed at $2,511.25 a ton.75 levels, June contract prices rose marginally from Rs.452.50 per Kg to Rs.453.10 after hitting a high of 458.75.

Natural Gas
Natural gas for next-day delivery in New York declined to the lowest price in three months as scheduled gas shipment to the region’s residential users tumbled 17 percent.

Prices at the Transco-Z6 hub, which delivers gas to the New York City region, dropped 13 percent as gas delivery to households in New York state fell to 3.01 million dekatherms (about 2.93 billion cubic feet), down from yesterday’s 3.62, according to Bloomberg data.

Transco-Z6 prices declined to $4.3999 per million British thermal units on the Intercontinental Exchange, the lowest levels since Nov. 24. Gas at the Tetco-M3 hub, which also transports gas to the New York area, slid 3.2 percent to $3.9806.

Scheduled gas shipments for residential use in the U.S. declined 11 percent to 32.6 million dekatherms, the lowest level since Nov. 16, according to the Bloomberg data. Temperatures will be above normal in the U.S. East and Midwest through March 8, according to Commodity Weather Group LLC in Bethesda, Maryland.

In India at MCX, Natural gas March contract closed lower by 4.13 % to Rs.171.50, April contract prices declined from Rs.187.90 per Kg to Rs.177.50, down by 5.80 per cent.

Major Headlines
Commexes turnover has crossed Rs 100 trillion mark till Feb 15: FMC
The Forward Markets Commission (FMC) on Wednesday said the turnover at the commodity futures market crossed Rs 100 trillion-mark till February 15 of the current fiscal, buoyed by futures trading in bullion and energy items. The turnover stood at Rs 66.24 lakh crore in the same period last year.

Gold gains 1 percent, silver jumps on oil rally, Libya
Gold rose above $1,430 an ounce on Friday, while silver surged 3 percent to 31-year highs, as soaring oil prices fueled by widening clashes in Libya prompted investors to pile into safe havens.

Rapid growth of BRIC strengthened trade ties with low-income nations: IMF
The rapid economic growth of the BRIC — Brazil, Russia, India and China — has helped create the global commodity boom and strengthened its trade ties with low-income countries, the International Monetary Fund said.


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